Most trust investors will be aware that discounts have widened significantly since the start of this year but the latest press release from the AIC puts it into perspective.
Exploring the world of investment trusts
Most trust investors will be aware that discounts have widened significantly since the start of this year but the latest press release from the AIC puts it into perspective.
With many of us looking to invest ISA allowances, either for the current tax year or the forthcoming one, the seemingly enormous discounts many trusts trade at might seem very enticing. But it’s worth remembering that not all discounts are equal.
While most trusts still trade at a discount, increasing numbers are trading at premiums. Should we buy something that’s reassuringly expensive or be wary in case the price has been driven too high?
Tetragon, which invests in a diverse range of alternative assets, trades on a massive discount for a variety of reasons. It’s a risky but potentially lucrative opportunity.
Despite decent long-term performance and 51 years of rising dividends, Caledonia Investments continues to trade at discount of nearly 20%.
Z scores can help gauge whether an investment trust is relatively cheap or expensive. But they do have some limitations.
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